Knowledge for Buyers


select your buyer AGENT

There's a misconception that real estate agents just do searches for listings and bring them to the buyer for consideration.  This is actually just a small part of what a buyer's agent will do for you.  The buyer's agent will be your subject matter expert, advisor, negotiator, problem solver, and resource expert to recommend other service providers. The best part is that working with a buyer’s agent costs nothing to the buyer! The buyer’s agent collects his or her portion of the sales commission from the seller at the closing. Additionally, buyers working with an agent are more likely to negotiate better prices and other favorable aspects of the deal such as negotiating various fees, expenses, concessions, and other components of the deal that may be overlooked when a buyer is working without a knowledgeable buyer’s agent. Don’t leave money on the table. It costs you nothing to have, but could actually cost you for not having one. All seller agents in New York City are happy to co-broke so don’t think this weakens your position as a buyer. As a matter of fact, good seller agents will prefer to work with a knowledgeable buyer’s agent on the deal - especially if there’s a board package involved.


When to buy or rent

Sometimes its obvious if you should buy or rent and sometimes it’s not. Those who aren’t sure about what to do, have a look at this New York Times interactive tool that will help you understand the financial pluses and minuses to buying versus renting with your particular financial goals in mind. Have a look.


your finances

Get Financially Qualified - Starting to look at property before fully understanding your overall financial picture is a bit like putting the cart before the horse. It’s really critical to fully understand your finances before you start your search. Knowing how much you have in assets will help you and your real estate agent focus realistically on what you can purchase. Understanding your finances will also put you in control of what you are willing to borrow from the bank and prioritize your saving for other life events such as retirement, vacations, schooling, etc. Banks are often willing to give you more money during the qualification process because they aren’t taking into full account all of your other life expenses. So be your best advocate and know your financial status so you know how much to borrow and how much to not borrow. Talk to your real estate agent for recommendations on bank lenders and mortgage brokers as they’ve had repeat experiences with these professionals and know what kind of service you can expect.

INTERACTIVE TOOL

Wells Fargo Mortgage Calculator

Get Pre-Qualified

Start the conversation with a bank lender or mortgage broker to understand at a high level what you can afford. There are no commitments or time frames for action with a pre-qualification. It’s a high level understanding of the types of loans and amount you will qualify for, but keep in mind that you’ll need to have a pre-approval when the time comes to present an offer.

Get Pre-Approved

Getting pre-approved is the important step to starting the buying process. It’s a more official process where your finances will be vetted in a more detailed manner and the approval will provide exact details about which loan types can be offered along with interest rates and loan amounts. You will receive a letter from the lender stating all of these details which can then be presented to your buyer agent and eventually the seller agent and seller for qualification on an offer you will make. Pre-approvals often have expiration dates of approximately 60 days from the date they are issued. If they expire, they can be easily renewed.

REBNY (Real Estate Board of New York) Financial Statement

The REBNY Financial Statement is a very powerful piece of paper and a critical tool for any NYC buyer. It is where all conversations will start with your bank, your real estate agent, and all seller agents and sellers you make offers on at any point in your search.


Condo vs. co-op

There are a few key differences between owning a condominium (condo) and owning a cooperative (co-op). Owning a condo is similar to owning a house in that the condo is considered “real property.” In other words, those who buy condos receive a deed and a specified piece of real estate, while those who purchase co-ops hold shares of the apartment corporation that owns the building and a proprietary lease to a specific unit. Condos are typically more expensive, but generally have more flexible financing terms.

source: The Corcoran Group

source: The Corcoran Group


Neighborhoods

This seems pretty straight forward for some buyers, but for others this presents a challenge. There are various factors that can determine which neighborhood you’ll eventually want to live in. They can be commute time to work, proximity to your children’s schools, a desire to be around a lot of activity or the opposite where you are in a quiet enclave, being near a park or even having a particular view or any type of view from your apartment for that matter. There are numerous reasons why people live in the neighborhoods they do, but one thing is for certain… there’s a NYC neighborhood for every person. You just have to discover what resonates with you. Some people choose to rent in a neighborhood to get a feel before committing long-term to a purchase. Others might have have friends and family that live in a neighborhood which give them unique insight and exposure to the neighborhood. Others are just so decisive that simply spending a day walking around an area is enough for them to know what suits them or not. Sometimes it just comes down to pricing and space of the apartment.


PURCHASE TIMELINE

This is for illustration purposes only and is meant to give high level guidance on the purchase timeline for buying in NYC. It is no way a declaration of the exact time it takes to buy an apartment.

source: The Corcoran Group

source: The Corcoran Group


CLOSING COSTS for co-ops

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Real Estate Attorney for estimates that are relevant to your specific sale.

FOR THE PURCHASER

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Real Estate Attorney for estimates that are relevant to your specific purchase.

Own Attorney: Varies*

Building Management Agent Fee: $500 and up

Move-in Deposit†: $500 - $1,000 (usually refundable if no damage)

Mansion Tax: 1% of total purchase price when price is $1 million or more

Lien Search: $350

Maintenance Adjustment: Pro-rated for month of closing

MORTGAGE ASSOCIATED FEES

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Mortgage Banker for estimates that are relevant to your specific purchase.

Origination Costs – points: 0 - 3% of loan

Application, Credit Check, etc: $500 and up

Appraisal: Varies*

Bank Attorney: $800 - $1,250

UCC-1 Filing: $125

CLOSING COSTS for cONDOS

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Real Estate Attorney for estimates that are relevant to your specific sale.

FOR THE PURCHASER

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Real Estate Attorney for estimates that are relevant to your specific purchase.

Own Attorney: Varies*

Building Application: $500 and up

Title Insurance, Title Search & Recording Fees: 0.6% of sale price and up

Title Closer Customary Fee: $200

Mansion Tax: 1% of total sale price when price is $1 million or more

Move-in Deposit†: $500 - $1,000 (usually refundable if no damage)

Contribution to the Superintendent’s Residence: Prices can vary so be certain to inquire

Common charges, property taxes & insurance premium: Adjustments pro-rated as of closing

MORTGAGE ASSOCIATED FEES

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Mortgage Banker for estimates that are relevant to your specific purchase.

Origination Costs – points: 0 - 3% of loan

Application, Credit Check, etc: Varies*

Appraisal: Varies*

Bank Attorney: $800 - $1,250

Mortgage Recording Tax: 1.8% for all mortgages less than $500,000; 1.925% for all mortgages of $500K or more minus $30 for townhomes Real Estate Tax Escrow: 0 - 6 months, depending on lender requirements

EXCLUSIVE TO NEW DEVELOPMENT FEES

Disclaimer: These estimates are for guidance only and the actual amount can end up be be higher or lower than these estimates. Always work with your Real Estate Attorney for estimates that are relevant to your specific purchase.

NYC Real Property Transfer Tax: 1% to 1.425% of sale price**

NYS Transfer Tax: 0.4% of sale price (Transfer taxes are calculated and added to sale price (for tax purposes only) and then recalculated based on the bulked up price)

Sponsor Attorney Fee: $2,500 - $3,500

Working capital fund contribution: One-time fee equal to 1 or 2 months common charges, depending on condominium